TORONTO – The Ontario government’s first mid-pandemic budget will set aside billions of dollars for COVID-19-related health-care costs and slash taxes and hydro prices for businesses.
“Ontario weathered the first wave and emerged in a strong position relative to jurisdictions around the world,” Finance Minister Rod Phillips wrote in his budget introduction.
“Recognizing the sober truth that we will be facing this pandemic for some time, Ontario is at a pivotal moment. … The key ingredient to our recovery will be creating the conditions for economic growth.”
Phillips was scheduled to deliver his first budget as finance minister in March, but then the pandemic hit. There was too much economic uncertainty to table a budget at the time, he said.
Thursday’s budget is unusual. It largely outlines spending that has already happened, rather than unveiling and costing out the government’s plans for the upcoming year.
Since Ontario’s first positive case in January, 80,690 Ontarians have contracted COVID-19 and 3,195 have died. There were 318,500 fewer jobs in the province in September than there were before the pandemic, and unemployment stands at 9.5 per cent, according to the budget.
Premier Doug Ford’s government is spending more than any other Ontario government in history with this $187-billion budget, of which $38.5 billion is deficit spending. Ford had previously promised to balance Ontario’s budget by the 2023/24 fiscal year, but now says that isn’t possible. Phillips says his next budget — to be tabled March 2021 — will set out a path to balance.
It will set aside $4 billion to fight the novel coronavirus next year and $2 billion to do so the year after. No specifics were provided as to how this money will be spent.
The government is also making changes to save businesses money, including:
- Cutting hydro rates for medium and large commercial and industrial businesses by moving the cost of clean energy contracts off those ratepayers and onto taxpayers,
- Making permanent a COVID-era exemption from the Employer Health Tax on the first $1 million of a payroll;
- Reducing the Business Education Tax rate to 0.88 per cent, which the government says will reduce the tax by 30 per cent on employers paying the highest rate;
- Spending $680 million on broadband infrastructure over four years.
The government will also spend $100 million to retrain people who were laid off, like those in the hospitality sector.
“There are long-standing structural barriers that we know, without action, will prevent the growth necessary for job creation and a full recovery,” Phillips told reporters. “They existed before COVID-19. But what was a strong headwind for job creators then could prove a hurricane impossible to overcome in the post COVID-19 world.”
Opposition Leader Andrea Horwath said the measures will only help businesses that are still doing well.
“Let’s face it, Main Streets across Ontario are crumbling,” she said. “If you’re boarding up your windows because you’re going out of business, there’s nothing for you to avoid that scenario.
“It’s really unbelievable.”
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No big changes to health care, long-term care
The province did not announce any significant changes to health care. If the contingency money for COVID-19 goes unspent, the system will continue to be funded below the level that the province’s financial watchdog says is necessary.
The biggest change for long-term care, where 62 per cent of COVID-19 deaths have happened, is that a minimum standard of care will gradually be implemented. Ontario announced Monday that it will spend $1.75 billion over five years so that residents get at least four hours of care a day by 2024/25, up from the current average 2.75 hours.
But no details about the increased staffing appeared in Thursday’s budget. Aside from COVID-19 measures, long-term care funding is only up marginally from pre-pandemic levels.
Research has suggested that the province’s $4.5-billion system needs $1.8 billion more every year.
Phillips said the money will be there when the plan is ready.
“We’re talking about tens of thousands of people who need to be trained … Every year, there will be progress,” he said.
“The premier has said that it will happen and it will happen.”
Horwath said it was “horrifying” that the budget did not specifically allocate money to improve conditions in long-term care.
“It’s not just extremely disappointing, I think it’s extremely irresponsible.”
Other highlights for parents, seniors, Black youth
Other highlights of the budget include:
- Increasing funding for the Black Youth Action Plan to $60 million over three years,
- One-time payments of $200 to $250 for parents to help cope with the pandemic,
- A 25-per cent home renovation rebate for seniors so they can live independently for longer,
- $3 million a year to create “mobile crisis intervention teams” that pair police officers with mental health workers.
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